Business Context and Reporting Period
This Form 8-K was filed by Ultra Clean Holdings, Inc. on July 24, 2008. The report addresses Item 5.02 regarding compensatory arrangements for certain officers, specifically the approval of new change of control severance agreements and an amended severance policy for executive officers Messrs. Granger, Sexton, and Savage.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses exclusively on executive compensation terms rather than financial performance metrics.
Material Changes
The Compensation Committee approved the following material changes to executive compensation:
- Execution of new Change of Control Severance Agreements for Messrs. Granger, Sexton, and Savage.
- Amendment of the company's severance policy to include benefits for termination without cause in the absence of a change of control for these three officers.
- Superseding of prior severance benefits outlined in Mr. Granger's employment agreement and Mr. Savage's offer letter.
Guidance, Outlook, and Management Commentary
Management commentary indicates these changes were made as part of a regular review of compensation matters and market practices. The primary objectives were to address the expiration of Mr. Sexton's employment agreement, the limited remaining duration of Mr. Granger's agreement, and to ensure consistent severance benefits among executive officers. No financial guidance or outlook was provided in this filing.
Severance Benefit Details
Upon Change of Control (Termination without cause or resignation for good reason within 12 months):
- Base Salary: 150% of current base salary (200% for Mr. Granger).
- Cash Bonus: 150% of average annual cash bonus over the prior 3 years (200% for Mr. Granger).
- Equity: 100% vesting of unvested awards (performance stock awards remain subject to criteria).
- COBRA: Reimbursement for up to 18 months (24 months for Mr. Granger).
Without Change of Control (Termination without cause):
- Base Salary: 100% of current annual base salary (150% for Mr. Granger).
- Cash Bonus: 100% of average annual cash bonus over the prior 3 years (150% for Mr. Granger).
- Equity: Vesting of awards that would have vested within 12 months (18 months for Mr. Granger).
- COBRA: Reimbursement for up to 12 months (18 months for Mr. Granger).
Investor Verification Checklist
- Verify the specific base salaries and historical bonus averages for Messrs. Granger, Sexton, and Savage to calculate potential liability.
- Review the total outstanding unvested equity awards for these officers to assess the impact of accelerated vesting.
- Confirm the status of Mr. Sexton's and Mr. Granger's employment agreements to understand the timeline of the prior expirations.
- Check if similar severance terms have been extended to other executive officers not named in this filing.